In an effort to boost tourism, the United Arab Emirates (UAE) on Monday, December 16, announced the launch of a new value-added tax (VAT) refund system for e-commerce purchases for tourists during their stay in the country, which is considered the world’s first of its kind.
This new system in collaboration with Planet, the authorised operator of the VAT refund system for tourists, aligns with FTA’s (Federal Tax Authority) plans to adopt ‘proactive solutions’.
The new system allows tourists to request VAT refunds directly from registered e-commerce platforms by submitting their travel document details before their orders are shipped. The VAT refund registration is completed once the tourist’s identity is verified during delivery or online order fulfillment.
“We are proud of the success of the Federal Tax Authority in launching the world’s first electronic system that enables tourists to recover VAT on their e-commerce purchases during their stay in the UAE.”
“The VAT refund procedures are processed smoothly, quickly, and efficiently, from the moment of purchase until the refund is completed when the tourist departs the country.”
Khalid Ali Al Bustani, Director General of the Federal Tax Authority, said.
In January 2018, the UAE introduced a 5 percent VAT rate, aiming to diversify the economy and reduce oil dependence.
Since November 18, 2018, the UAE has implemented a VAT refund scheme for tourists, enabling them to request refunds for VAT incurred on local purchases.
In September 2022, the UAE introduced a paperless tax refund system for tourists, eliminating the need for receipts.
